|OIL chairman Butola|
gas exported from Canada for 20 years.
Petronas, which bought Progress Energy Canada in 2012, announced the sale to IOC on Friday.
The Maharatna refiner is guaranteed 1.2 million metric tons of liquefied natural gas (LNG) per year for two decades from the B.C. LNG project, which could be in operation by 2018.
The statement quoting RS Butola, chairman, IOC, said: “This transaction provides an excellent opportunity for IOC to secure upstream participation in the highly prospective Montney play in Canada, along with securing long-term LNG supply for India’s growing gas requirements. IOCL will have access to assured LNG supply of 1.2 MMTPA for a minimum period of 20 years from the PNW LNG Integrated Project. This LNG will partly meet the requirement of IOCL's upcoming 5 MMTPA Ennore re-gasification terminal in Tamil Nadu.”
The project holds 2P reserves at year end 2013 of 8.35 Tcfe and best case contingent resources of 24.7 Tcfe. The total reserves and resource potential is in excess of 50 Tcfe in which, IOCL share will be over 5 Tcfe. Progress Energy Canada is currently producing approximately 400 million cubic feet equivalent of natural gas per day in North East British Colombia which is currently supplying the Canadian market, the statement added.
The acquisition gives IOC an opportunity to be part of a world class large-scale resource play and greenfield LNG development in a stable Canadian regime, providing IOC access to significant upstream gas resources and securing LNG volumes for our domestic market.
Petronas, Progress Energy Canada and Pacific NorthWest LNG propose to make a decision this year on whether to proceed with the Pacific NorthWest LNG export facility on the B.C. coast, near Prince Rupert, which would require a total investment of $9-11 billion.
Progress Energy and its North Montney Joint Venture have at least 8.35 trillion cubic feet of gas reserves in British Columbia fields to support the LNG project. Progress has ambitious plans for 2014, and plans to drill an estimated 170 wells in B.C.
Malaysian company Petronas, which paid $5.2 billion for Progress Energy, will reduce its stake in Pacific NorthWest LNG to 50 percent by selling shares to Asian gas buyers, the unit’s President Greg Kist said in November.
Petronas sold 10 percent to Japan Petroleum Exploration last year and another three percent to PetroleumBrunei. Petronas currently owns 77 per cent of the project.
This year, the LNG facility planned near Prince Rupert, B.C. will undergo an environmental review by the Canadian Environmental Assessment Agency and the B.C. Environmental Assessment Office.
In its bid to make global foray, IOC follows rivals including ONGC and GAIL India Ltd in securing energy supplies through overseas acquisitions to meet growing domestic demand.
IOC is India’s flagship Maharatna oil company with business interests spreading the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to R&D, exploration & production, marketing of natural gas and petrochemicals. By venturing into the renewable and the nuclear energy, the company has grown and evolved itself from a pure petroleum refining and marketing company to a full-fledged energy company. IOC is India’s largest company by sales with a turnover of $76.4 billion for the year 2012-13. It operates 10 refineries with 65.7 MMTPA capacity; a network of 11,214 km crude oil, product and gas pipelines. IOC’s exploration and production portfolio comprises of 23 oil and gas blocks, 13 domestic and 10 overseas blocks.